Major investors commit to keep Moa afloat

Boutique brewer Moa Group has posted a wider full-year loss and says major shareholders Pioneer Capital and the Business Bakery have committed to providing enough financial support to allow the company to keep operating for at least the year ahead.

The net loss was $5.8 million in the 12 months ended March 31 from $1.9m a year earlier, the Auckland-based company said in a statement.

Sales jumped 88 per cent to $4.6m but were outpaced by a 137 per cent jump in cost of sales, trimming gross profit to $792,000 from $848,000.

Expenses soared 135 per cent to $6.5m, as costs of distribution, administration, and sales and marketing all rose.

Moa warned in November that the full-year loss would be between $5m and $6m, bigger than was projected in its prospectus, with lower-than-expected sales blamed on problems with its distributor, which it has now replaced with a more direct distribution deal.

At the time the company said it was embarking on a strategic review to improve performance.

On Monday Moa said it signed a long-term contract to have much of its beer manufactured by McCashin's Brewery in Nelson, while higher-margin specialty brews would be made at its Blenheim site, where expansion has been bogged down by a protracted resource consent process.

While it initially gained consent to expand its brewery in Blenheim, it was subsequently appealed by a number of parties and Moa has opted to try to resolve the issues by mediation rather than what it calls "an expensive appeal process".

Pioneer Capital, which owns 24 per cent of the company, and The Business Bakery, on 23 per cent, have provided Moa with "a letter of commitment to provide financial support that the directors believe is sufficient to allow the group to continue to operate and meet its obligations for at least the next year," the company says in its accounts.

"The details are still being determined."

Chief executive Geoff Ross, who is also a director of The Business Bakery and drove the creation of both 42 Below and Ecoya, now renamed Trilogy International, said contract brewing at McCashin's adds "significant brewing capability" for high volume brands.

"In short this gets us the efficiencies of scale without significant capital investment," Mr Ross said.

Moa shares last traded at 62 cents, about half the $1.25 sale price in its 2012 initial public offering.